No matter how hard you try, it’s impossible to leave debt behind. yes, debt is a predator lurking in the shadows of your life, following you from direction to direction and place to place. And just when you think you’re free, you get a letter in the mail from a debt collector you don’t even recognize.
but you never want to be tricked into paying a debt that isn’t yours. That is why a debt validation letter is so important. and under federal law, a debt collector must give it to you upon request. So why is a debt validation letter so important? let’s take a look.
what is a debt validation letter?
A debt validation letter is what a debt collector sends you to prove that you owe money. This letter shows you the details of a specific debt, describing what you owe, who you owe it to, and when they need you to pay.
Legally, a debt collector must send you a debt verification letter within five days of their first contact with you. and if not, you must ask for one. why? because it helps you determine if the debt is really yours and if there is something suspicious behind the scenes. (and when it comes to debt collectors, fishy is their middle name). Just because it looks official doesn’t mean it’s your bill to pay.
Remember: when you request your letter, do it in writing and send it by certified mail. but don’t forget to ask for an acknowledgment of receipt. (so you know they got it!)
why you need a debt validation letter
Listen to this: In 2020, the Federal Trade Commission (FTC) received about 82,700 consumer complaints about debt collectors, and a whopping 49% of those complaints were to report attempts to collect debts they didn’t owe! 1 that’s definitely not right.
And that, folks, is exactly why you need a debt validation letter.
chances are your “debt” isn’t even real. or your debt may be years old: sold, resold, and resold some more. Creditors sell outstanding debts to collection agencies who then unleash their bloodhounds to come after you. but these agencies do not have the best record keeping skills. mistakes happen and mistakes are common.
If you go ahead and pay off the debt without requesting a debt validation letter, you could end up:
- pay money you don’t owe (it’s not okay)
- reactivate the debt beyond the statute of limitations (or the amount of time a creditor can legally pursue you for a debt)
- falling victim to a debt collection scam (ouch!)
After a debt collector receives your request, they must stop all forms of communication with you until they have responded with a debt validation letter. That means no phone calls, no letters, no reporting your debt to the credit bureaus.
what a debt validation letter reports
When you receive your debt validation letter, you should include several things, including:
- how much you owe
- which creditor the collector represents
- an opportunity to dispute the amount of the debt within 30 days (after that, the debt will be presumed valid)
- confirmation that if you dispute the debt within 30 days, your debt will be verified by mail within another 30 days
- and a statement that if you request more information about the original creditor, then the debt collector or agency must provide it within 30 days.
what happens if the collection agency does not validate the debt?
Under the Fair Debt Collection Practices Act (FDCPA), a debt collector must respond to a request for a debt validation letter. if they don’t, they are violating the act. You can report them to your state attorney general, the FTC, or the Consumer Financial Protection Bureau (CFPB). you can also sue for up to $1,000.2
Be on your toes with these money freaks. keep copies of all documents and keep track of all communications, including phone calls, with debt collectors. keeping a detailed record like this will help in case you need to report it to the attorney general.
what to do after receiving a debt validation letter
Once you receive your debt validation letter, read it carefully and make sure there are no errors. if the debt is yours, you must pay it. after all, this is where the rubber meets the road in little step 2.
Be as ruthless and unforgiving in paying your debt as debt collectors have been in pursuing you. Picking up a side job, putting in extra hours at work, selling all the stuff collecting dust in your basement – now is the time to spend everything you have on your debt.
But let’s say you get your debt validation letter and something still seems wrong. Your next step is to submit a debt verification letter. sure, these two letters sound the same, but they are very different.
Debt Validation vs. Debt Verification: What’s the Difference?
The debt validation letter is the document you receive from the debt collector that outlines what you owe, who you owe it to, and important information about next steps.
The debt verification letter is a letter you write and send to the debt collector, disputing the debt (if you really don’t owe it or owe as much as the collector says you owe). You will also send this letter by certified mail with a return receipt requested so that you have a record of your communication with the collector.
do you see? the letters have similar names, but very different goals.
debt validation letter
debt verification letter
Who sends it?
debt collector
you
what does it say?
describes the details of your debt
formally dispute the information in the debt validation letter
how long to respond?
You have 30 days from receipt of a debt validation letter to submit a debt verification letter.
Here’s the important part: You only have 30 days to respond to a debt validation letter with your debt verification letter. if you do not dispute the debt within 30 days, the debt is assumed to be valid. that means the debt collector can still contact you. you can still submit a dispute after 30 days. but at that point, the debt is considered valid and a debt collector can still legally contact you.
Want to write your own debt verification letter? see our sample letter in the next section.
how to write a debt verification letter
Writing a debt verification letter seems like a chore when you’re bombarded by debt hounds. but this letter will really give you the break you are looking for, at least for a while. because again, once you send your written letter disputing your debt, collectors will not be able to contact you unless it is in response to your letter (and it has to be in writing).
then. . . Besides saying that you are not responsible for the debt they are trying to collect, what else should you include in your letter? great question here are some things the annoying debt collector should provide you:
- proof that this debt really belongs to you, such as a signed contract
- how much you owe (based on the latest statement or bill)
- if the debt is past due the statute of limitations
- the last action taken on the account
- and proof that the debt collector has the legal right and license to pursue this debt in your state
Ready to start writing your own letter? we have a template for that. You can use this free sample letter to write your own debt verification letter.
what happens now?
If a debt collector cannot verify your debt, they should stop contacting you about it. And they have to report it to the credit bureaus so they can remove the debt from your credit report. don’t let this part slide! keep checking your credit report until you see a change.
If the debt is not eliminated, you should contact the credit bureaus and ask them to investigate your case. Again, if the collector doesn’t follow the rules, you should report it to your state’s attorney general, the FTC, or the CFPB.
If you ever thought writing a letter wouldn’t change your debt situation, think again! And now that he’s showing those debt collectors who’s boss, it’s time he got rid of his other debts, too.
With Financial Peace University (FPU), you’ll learn how to pay off all of your debt (yes, we said all of it), budget your money, and save for your future, so you never have to worry about going back. never be in debt again. start watching fpu today to start making progress!
And if you feel overwhelmed and just need someone on your side, contact one of our financial advisors. they can answer your questions, guide you through your specific situation, and help you get rid of creditors. Go ahead and book a free coaching consultation today!